Barry Callebaut shows strong profit growth

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Barry Callebaut shows strong profit growth

Market success and synergy benefits strengthen balance
sheetBarry Callebaut, the world leading producer
of industrial chocolate, reportssolid profit
growth after tax of 34%, boosting its net profit from CHF
70.5million up to CHF 94.7 million. This equals
earnings per Share of CHF 18.3compared to CHF
15.7 for the previous year. Excluding exceptional items,
theoperating profit after tax was up even 38% to
82.4 million. The Board ofDirectors proposes the
Annual General Meeting the payment of a dividend ofCHF 6.-- per share to all 5,170,000 outstanding
shares.

Zürich, November 17, 1998. Barry Callebaut, the world leading
producer of industrial and specialty chocolate, significantly
increased consolidated net profits in its first year as a public
company. Operating income (EBIT) for fiscal 1997/98 ended per
August 31, 1998, rose by 25% from CHF 118.4 million to CHF 148.1
million and exceeded expectations. Because of lower corporate tax
rates as well as higher volumes and EBIT per ton, profit after tax
reached CHF 82.4 million, excluding exceptional items. This equals
an increase of 38% compared to the prior year. After extraordinary
items of net CHF 12.3 million stemming from the disposal of non
core assets and of 51% of the Ivory Coast subsidiary, Barry
Callebaut shows a profit after tax of CHF 94.7 million. This is an
increase of 34% as compared to the previous yearæs figure of CHF
70.5 million. Barry Callebaut thus reports earnings per share of
CHF 18.3 versus CHF 15.7 the year before. As announced earlier,
Barry Callebaut achieved a solid volume growth in its core products
of 8% to a total of 60,005 (PY: 519,394) tons while net sales grew
by 12% from CHF 1.9 billion to CHF 2.2 billion. With the underlying
global chocolate market growing by 3%, Barry Callebaut was thus
able to expand its market share to 37% versus 35% in the previous
year.

While gross profit per ton declined by 2.6%, Barry Callebaut was
able to improve EBIT per ton by 18% from CHF 209.-- in 1997 to CHF
247.--. This improvement was possible thanks to the streamlined
cost structure and the first effects of synergy benefits resulting
from the merger of Barry and Callebaut in 1997 that start t o pay
back as expected.

The combined effect of the creation of new share capital in the
course of the Initial Public Offering and the appropriation of
reserves resulted in an improved net debt of CHF -453.8 (PY -665.3)
million and a stronger net debt-to-equity ratio of 78% (PY 211%).
The capital generated during the IPO was primarily used to pay back
debt. Together with the impact of converting some short term into
long term loans, current liabilities declined by 50%.

Financial year 1998/99 started within expectations. With a
maximum exposure of 10% of total sales generated in emerging
markets, the Group Management is confident about the future despite
the economic problems in Asia and in parts of South America.

Pierre Vermaut, Chairman of the Board of Directors, comments the
profit statement: "The Board of Directors and the Group Management
are very pleased with the successful performance of Barry
Callebaut. The merger synergies start paying back as expected. The
strong financial results give us additional competitive advantages
to provide our clients with timely service and supply them with a a
consistent top product quality at attractive prices. The results
for fiscal 1997/98 as well as the proposed dividend payment are a
good way to thank our shareholders for their confidence. Board,
Management and Staff are determined to continue creating value for
our clients and shareholders alike".

The Annual General Meeting of shareholders will be held on
December 11, 1998 at 3:00 p.m. at the Zürich Marriott Hotel in
Zürich/ Switzerland.